NEW YORK, DEC. 9 -- Pan Am Corp. has tentatively agreed to a deal in which its main airline business will merge with Braniff Inc. to create a new company if Braniff is able to win $200 million a year in concessions from Pan Am's labor unions, according to a tentative deal signed tonight .
The plan seems to represent a victory for Pan Am Chairman C. Edward Acker and a defeat for Pan Am's vice chairman, Martin R. Shugrue Jr., who had reportedly favored keeping Pan Am intact.
Under the agreement, Pan Am would spin off its Pan American World Airways unit to shareholders of the parent company, and labor would receive between 13 percent and 20 percent of the stock in the airline.
Assuming that went through and Braniff was able to win "substantial" concessions from Pan Am's labor unions, Dallas-based Braniff would take over Pan American World Airways, Pan Am said.
The agreement was in the form of a letter of intent signed tonight, Pan Am spokeswoman Pamela Hanlon said.
In advance of the agreement, sources had described the negotiating positions of the two sides as sharply divided.
Shugrue's plan reportedly offered $180 million in annual cost savings from the unions in return for a 20 percent stake in Pan Am. Although he reached tentative accords with unions representing the pilots and flight engineers, the board reportedly gave Shugrue until today's meeting to come up with additional concessions.
The pilots had agreed to $55 million in concessions a year, but the board was seeking about $11 million more, one source said. The engineers, who had tentatively approved $24.8 million, were being asked to increase their givebacks by about $5 million.
The unions also would have to drop their job security demands, the sources said.
None of the additional requests were being viewed positively by the unions, which have tended to look coolly on proposals from Pan Am's current management.
The Braniff plan, meanwhile, sought a total of $200 million in concessions in exchange for a 20 percent share of the merged company. If Braniff Chairman Jay A. Pritzker's proposal were approved by the board, Pan Am would retain its shuttle operation, which flies between points in the Northeast; Pan Am Express, a commuter airline; and World Services, which provides ground services to military and commercial installations.
The board met last week and again Monday before adjourning until today. Some said the company's official silence in the aftermath of those protracted and, reportedly, sometimes stormy sessions was an indication of the deep rift that had developed among directors.
The carrier's largest union, the Transport Workers Union, had been trying to negotiate a separate contract with managemen